INNOVATIVE JOB CREATION BOOSTS CONSUMER POWER.

Growing international interest in Dutch products has brought five years of sustained economic growth to the Netherlands. The Dutch Ministry of Foreign Affairs ranks the nation as "the world's sixth-largest exporting country (third-largest in the export of food), the sixth-largest source of investment, and its gross domestic product (GDP) is the 14th highest in the world."

The nation's economic growth averaged 3.8 percent over the past five years, with 4 percent growth in the volume of GDP in 2000. Reports for the first quarter of 2001 show an increase in GDP of 5.2 percent, making this country a hub in the area of international commerce.

A SOLID CONSUMER BASE The expansion of the Dutch economy is primarily due to increases in consumption, investment, and exports of goods and services. However, not all economic indicators are showing positive signs. Last year's average rate of inflation was driven up to 2.6 percent, the highest rate since 1994. Escalating global oil and energy costs contributed 1.1 percent to this increase, as did a rise in the duty on motor fuels and an increase in the country's regulatory energy tax.

During the first quarter of 2001, the economy grew a modest 2.0 percent from the same quarter last year. On 18 May 2001, the Ministry of Economic Affairs reported that: "Growth rates are down across all sectors of industry. Even in commercial services, which until recently were the driving force behind the thriving economy, growth has slowed down across the board. The increase in construction output is also coming to a standstill. Only in non-commercial services has growth held stable."

The Netherlands' national income grew by 7.3 percent during the first ten months of last year. With a net per capita national income of approximately US$18,460 in 2000, the volume of consumption rose by 2.9 percent compared with 1999. The Netherlands Foreign Trade Agency reported that there was a sharp downturn in durable goods, especially in the auto industry.

Consumers spent less on food, drink, and tobacco in 2000. Preliminary indicators for the first quarter of 2001 showed a generalized decline in consumer spending. The increase in food purchases was offset by a decline in the purchase of durable goods. The result was an average increase in consumer spending of 2.0 percent, compared with 3.9 percent in 2000.

During January and February 2001, the Dutch trade surplus was up 85 percent from the same time last year. By the end of the first quarter of this year, exports slowed to 6.6 percent from just over 9 percent in 2000. The value increase for exported goods is up 16 percent, and the value increase for imported goods rose by 12 percent. The trade deficit with Asia alone rose by nearly US$1.03 billion. The May report from Statistics Netherlands states: "In terms of value, nearly a quarter of all goods imported into the Netherlands come from Asia. Imports from this region have increased considerably in recent years. Exports to Asian countries have also increased, although not to the same extent."

THE LABOR ADVANTAGE Thanks to job stimulation programs that began in the 1980s, the Dutch labor market has demonstrated a remarkable ability to generate jobs. Part-time and open-ended contingency jobs (defined as any employment relationship that can be terminated within a limited period without costs to the user organization) have resulted in a significant decrease in the unemployment rate.

The Dutch government, labor unions, and employers' associations have actively supported a shift from permanent positions to various forms of temporary help. Regulations have been established to shorten dismissal procedures, limit the duration of contracts, and promote the use of temporary work agencies.

An analysis of job categories from 1987 through 1999 conducted by Rotterdam's Erasmus Research Institute of Management indicates that only 15 percent of job growth can be attributed to an increase in full-time jobs. Part-time jobs account for 57 percent, and contingent employment accounts for 28 percent of total job growth.

The seasonally adjusted unemployment figure for the first quarter of 2001 stands at 158,000, compared to 186,000 at the end of 2000. Based on a sample survey, the May 2001 report indicates that the number of unemployed could decline as much as 11,000 relative to the previous three-month period.

THE KNOWLEDGE RESOURCE With few natural resources, the Dutch people have tapped into the development and application of knowledge to broaden their economic base. An example is found in Rotterdam, which has become a major port for the processing and distribution of imported crude oil. These installations have spawned research institutes that study offshore drilling and companies that design and build entire refineries and off shore drilling platforms, as well as technologies for purifying wastewater, neutralizing gases, and processing waste.

With a population of 16 million registered residents, the Netherlands ranks sixth among the fifteen European member states, and first in population density. Only Sweden ranks above the Netherlands in many living standards. The Dutch government, labor, and business communities continue to demonstrate an ability to work cooperatively to create economic opportunity. In the face of limited resources, a small population, and a challenging labor market, the Dutch economy is growing steadily toward a promising future in international trade.